Setting up a savings or checking account for your child can be a smart move, to help teach them some financial responsibility. Early on, you can show them how to use a savings account or a checking account with the use of a ledger, so there are no surprises for them.
When they turn 18, this will give them some insight to how these accounts work and they are more likely to be more responsible with money. They will also at this point have established a relationship with the credit union, which will help them with their needs for student loans, credit card and even a mortgage loan later on. They can even switch over the joint accounts with mom and dad to individual accounts giving them a little more financial freedom.
Another loan to consider is an automotive loan. Since most young drivers are looking to get a vehicle early on. Taking advantage of a low APR through an established credit union loan will prove to be something that is very useful. This ball can be set rolling the day the young adult turns 18 and meets all the credit requirements that are in place.
Parents should discuss all these features and more with their children in great detail. The goal is to ensure that they have all the information they need to be successful and that can help to prepare them for real life situations later on. This includes also touching on the importance of protecting one’s credit, proper use of borrowed funds and how critical it is to stay on budget.
With a little effort on your part, you will be able to guide your children in the right direction and help them to avoid many of the credit mistakes that so many others make in their lifetime. After all, it takes just one credit card being misused on an array of video games before there are over the limit fees and missed payments that could otherwise be avoided, if the child is taught early on about how to protect their finances.